Pemex shale gas contract in doubt after López Obrador says no to fracking

New government's Coahuila delegate said hydraulic fracturing contracts will have to be reviewed

Published on Thursday, August 2, 2018

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The future of a US $617-million contract for the exploration and extraction of a shale gas deposit in Coahuila may be up in the air after president-elect Andrés Manuel López Obrador voiced his opposition this week to hydraulic fracturing.

State oil company Pemex announced four months ago it had signed a contract with Texas-based Lewis Energy to extract natural gas in the Olmos field in Hidalgo, Coahuila, part of the Burgos Basin, which is an extension of the Eagle Ford deposit north of the border.

It is expected to produce 117 million cubic feet of gas daily by 2021.

But when López Obrador was asked this week by reporters about the extraction process, commonly known as fracking, he had a blunt response: “We will not use that method to extract petroleum.”

Reyes Flores Hurtado, who will be the federal government’s general coordinator in Coahuila, stated that the environmental impact of fracking will be a priority item on the new administration’s agenda.

He said the Energy Secretariat will have to analyze the contracts and obligations made to determine whether they can be halted.

A researcher at the University of Texas at San Antonio pronounced López Obrador’s declaration as mostly symbolic. Thomas Tunstall told the climate science-focused website DeSmogBlog that he thinks fracking is years away from getting off the ground in Mexico.

“Best estimates are that any unconventional oil and gas production activity in Mexico is at least five to 10 years away, no matter what government policy is.”

He said a ban on hydraulic fracturing would have no economic impact in the short term. Most of the petroleum industry’s focus is on untapped conventional oil and gas reserves, which Tunstall described as substantial.

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